The report, which was delayed for a few months, identified 32 findings across the STM companies, including seven highlighted as priority where improvements are required to ensure that the businesses comply with the relevant Gibraltarian legislation and best practice, the firm said in a market update today (11 June).

The 21 other findings are recommendations that will help improve the governance and compliance framework of the business, the company added.

STM is a multi-national company listed on the London Stock Exchange with offices in the UK, Malta, Jersey, Spain and Gibraltar.

The review in question concerns its Gibraltar-based entity, which came under fire for certain aspects of its business, including internal compliance, corporate governance and conflicts of interest.

STM had initially fought off attempts by the Gibraltar regulator to investigate the business but conceded in January.

The report stated that STM companies should strengthen their Gibraltar Compliance Plan.

A plan has already been submitted to the Gibraltar Financial Services Commission (GFSC), with “more detail as to how monitoring and oversight will be carried out in future, including a rolling review of intermediaries and clients,” STM said.

The report provides a number of recommendations in this respect, including segregation for first line and second line of defence.

It also identified that there should be a more robust framework in place for identifying and recording how potential conflicts of interest across the businesses should be dealt with, the firm added.

Some recommendations, however, have already been implemented outside of the review period.

The appointment of a group head of enterprise risk management in March 2017, following a decision to recruit in mid-2016, has “already strengthened the overall governance and compliance framework of the overall group and thus benefitting underlying subsidiaries,” STM argued.

STM is now expected to engage with the GFSC in order to discuss the Recommendations of the report, and agree a plan of action to implement them.

The recommendations will “make the group's businesses more robust, and the board believes their implementation will ensure that the companies continue the improvement of the processes and systems that they use to conduct their activities in line with the requirements of the GFSC,” the firm concluded.